Look for selling opportunities, advises Sudarshan Sukhani

He advises investors to look for selling opportunities, if one does not have a short position. "There is no buying in the Nifty. If a trader sees a rally, that rally should be sold into," he adds.

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Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy.

Q: How you would approach the Nifty on expiry day today?

A: The expiry has its own volatility. Traders must understand that. But the trend is down. The approach should be to look for selling opportunities, if one does not have a short position. I do not know about intraday because intraday choppiness could come about. But if a trader sees a rally, that rally should be sold into.

It is easy to buy September 5,300-5,200 Puts and take the trade, if one gets a rally on any intraday bounce. There is no buying in the Nifty, which is very worrying. When the Nifty fell to 5,050, the Bank Nifty was at 10,000. The Nifty is still at 5,250, but the Bank Nifty is now exactly at 10,000. That means the Bank Nifty is not only underperforming, it is now ready for a break below what is equivalent to 5,050 in the Nifty. So, if the two indices do not go up together then this market is not going up. That is almost certain.

Q: The chart of Jet Airways looks negative?

A: The chart looks negative now. Its failure to cross Rs 400 decisively was the first red flag. Yesterday was only the last of the days in which Jet Airways continued falling. It’s broken up below Rs 370 levels.

I do not know whether this is a decline or a correction. We will assume it’s a correction, but it’s a tradable correction on the downside. So, Jet Airways is a short selling opportunity.

Q: You would sell HDIL today?

A: Yes, with a lot of regret. HDIL has confirmed a major bearish pattern which means that we are now looking at lower levels. This is not the low for HDIL. I was upbeat on this stock and that’s why the regret comes in.

But this is a market and we have to listen to it. HDIL is a positional short sell, not just for today.

Q: Lupin is a buy from pharmaceutical?

A: Lupin is part of pharmaceutical group which is doing outstanding, it is doing very well. Lupin’s rally has already started. We saw a mild correction on the back of the results, but that’s over. It is now on the verge of a small breakout. That will take it to Rs 600 and then a bigger breakout comes from there.

So, Lupin is a buying opportunity. That would apply for all pharma stocks. We have picked Lupin because it appears the best today.

Q: You have picked ITC from FMCG?

A: ITC is willing to go up. A lot of drama could happen today in which ITC would be a participant on the long side. So, not only for today, but otherwise also, if ITC shows any intraday strength, at least for intraday traders, it should only be a long only trade.

Q: You have picked Reliance Infrastructure on short side?

A: It is broken down. The equivalent levels for Nifty - 5,050 levels, for Reliance Infrastructure were Rs 470. It is already below that and that is very worrying. I think lot of other stocks are also doing the same thing.

It has not only broken that, it has failed to cross Rs 550-600 decisively, made a pattern of lower highs, now we have lower lows. This is the classic sign of a bear market emerging. I do not know whether that will come about. But much lower levels are possible before this decline ends.

Disclosure: I have no holdings in the stocks discussed.